Dan Hall: How we became 'consumers' instead of 'producers'

Dan Hall

Tuesday

Jan 29, 2008 at 12:01 AMJan 29, 2008 at 2:10 PM

The rush among politicians of both parties to look like they are doing something to head off a recession reminds me of something a school superintendent in one of our region’s wealthier districts said a few years ago.

The rush among politicians of both parties to look like they are doing something to head off a recession reminds me of something a school superintendent in one of our region’s wealthier districts said a few years ago.

Our lunchtime conversation had turned to the way in which so many suburbanites seem to assume that their privileged place in the world will somehow go on forever.

“What I wish I could get across to our students,” he said, “is that they might be poor someday.”

I told him I thought it even more important that students’ parents, the people who instill values and can vote, would realize their kids might be poor someday too.

This is not to suggest that the end is nigh. Economic recessions come and go. They are part of the normal cycle of things. Greg MacKay, chief economist for Canandaigua (N.Y.) National Bank and Trust Co., stated that view quite plainly the other day in the Democrat and Chronicle: “There’s a slowdown. So what? What we need here is some old-time religion. A little more saving, normal growth, and we’ll be fine.”

He was right about the need for “old-time religion,” economically speaking, but he went a little overboard with “so what.”

During the 1950s, my father worked for a small, non-union company that made goggles and other supplies for workers in the automobile plants. When times were especially good for the car companies he would bring extra work home, and my older brother and I helped him put goggles together at our basement workbench. Every once in a while, however, he would come home from work early. He would sit glumly at the kitchen table, saying nothing. Or perhaps he would pick an argument with my mother.

We all knew what that meant: Things had slowed down; my father had been laid off. We would buy our groceries on credit from a friendly neighborhood store while he sought whatever work he could find. We did not live in poverty — we never lost our house, which my father and grandfather had built, and all five of us kids eventually went on to college. But supper during those periods could mean just gravy and bread.

What got me thinking about the school superintendent’s comment was not the apparent imminence of another recession, however, but rather the tax rebates that both political parties have placed at the center of their proposals for a quick stimulus. At best, that is just election-year politicking. At worst, it is like offering whiskey to a drunk.

We need to reverse the personal values and the political ideology that have led America to live beyond its means. Millions of families, as well as the government itself, have maxed out their credit cards and spent down their equity. We have kept going only because governments in the oil-rich Mideast and newly industrialized Asia have been willing to keep lending us money by buying our treasury bonds.

Our borrowing and spending has decimated the value of the dollar, driving up the cost of oil and everything else we import from abroad. It has also allowed these same governments, some of which are not especially friendly to the United States, to buy huge stakes (and thus huge influence) in our largest financial institutions, such as Citibank, Merrill Lynch, and Morgan Stanley. (Why aren’t the politicians who are ranting about Mexicans coming here to pick apples and milk cows not equally alarmed about that?)

The government cannot “create jobs” by borrowing money from Saudi Arabia so that it can send checks to American families in the hope that they will then buy more high-definition televisions made in China. Government could, however, create jobs in the old-fashioned way: By spending money on things of long-lasting value.

All over the nation, roads and bridges are crumbling. Water and sewer lines need replacement. State and national parks have fallen into disrepair. Our inner cities are a national embarrassment. The United States has built no new power plants or oil refineries in decades. Europe and parts of Asia have far surpassed us in high-speed transportation. Even our military equipment is falling apart, because of the long war in Iraq.

A big rebuilding plan would not be without risk, because so many irresponsible members of Congress do not distinguish between real needs and pork for their districts. Done right, however, such spending would generate thousands of jobs, and would help rebuild the solid economic foundation that America once had.

We all ought to be sick of hearing about American “consumers.” There was a time when we were “producers.” It is our endless borrowing and our refusal to invest in our own country that raises the real possibility that our children could, indeed, one day be poor.